Partners in talks with Hallmark Health

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For obvious reasons, Partners Healthcare System Inc. sat on the sidelines during the early innings of the hospital merger and acquisition binge in Massachusetts.

The nonprofit medical giant was already seen as too big and powerful to win state permission to expand another inch by acquisition. The presumptive response from Attorney General Martha Coakley to any such idea could be summed up in three words: No, no, no.

But the rules may be changing. Partners is at the center of three potential health care deals that have already been disclosed. Now this: Partners is in talks with Hallmark Health System about yet another possible combination.

Hallmark is a local system that consists of two hospitals with a combined 368 beds - Melrose-Wakefield Hospital and Lawrence Memorial in Medford - as well as outpatient facilities. It started to negotiate with Partners after months of talks with Winchester Hospital failed to produce any agreement.

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A recent memo from Hallmark president Michael Sack to doctors and staff outlined discussions with Partners about a “possible affiliation.’’ A Hallmark spokesman confirmed the talks with Partners. A Partners spokesman would not comment on the talks.

Hospital negotiations can lead anywhere, including dead ends, and I have no idea what will come from the discussions between Hallmark and Partners, an organization that oversees Massachusetts General, Brigham and Women’s, and seven other hospitals.

But those efforts - combined with other negotiations or recent agreements - suggested a markedly different approach by Partners to upheaval in the state’s health care system.

Just six months ago, Partners struck a deal to acquire Neighborhood Health Plan, an insurer. More recently, Mass. General confirmed it was negotiating a merger with Cooley Dickinson Hospital in Northampton. Last week, the Globe’s Robert Weisman broke the story about talks between Partners and South Shore Hospital in Weymouth.

That level of activity would have been hard to imagine a year ago, out of the question two years ago. Clearly, Partners executives believe something fundamental has changed and they can win over an attorney general who has long viewed their market muscle as a big part of the problem with rising health care costs.

I’m not sure to what degree that is true. But two important developments may have opened doors for Partners.

For starters, the rapid expansion of Steward Health Care into a medical force has altered the competitive landscape. Steward, a for-profit company backed by private equity investors, spent hundreds of millions of dollars to quickly establish a big network of 10 state hospitals that emphasizes cost-conscious care.

Over and over, Coakley gave her blessing to deals that helped Steward build a network that rivals Partners when it comes to a count of hospital beds but not by any real measure of brand power.

Meanwhile, legislative leaders are expected to propose new health care reforms soon that will encourage so-called global payments and accountable care organizations as a way to better keep rising medical costs under control. Regardless of what happens in the Legislature this spring, change like that is coming sooner rather than later.

That kind of system would budget a set amount for health care providers to take care for patients - a big step away from the old pattern of billing for every service and procedure. It requires networks of health care facilities that should emphasize care at community hospitals if possible and city institutions when necessary for complex treatment of serious medical problems.

These looming changes are driving hospitals - big city and smaller suburban institutions - into each others arms. City hospitals will need reliable feeder networks sending a steady stream of serious medical cases to them for treatment. Suburban hospitals need resources - expertise and often cash - that big-city institutions can provide in return.

Steward drove a boom in hospital mergers and acquisitions last year, but appears to be nearly done buying general hospitals in Massachusetts. Many of the suburban hospitals most interested in affiliations or combinations now find themselves competing against Steward facilities. Survival may depend on a new affiliation with a big partner of their own.

Enter, Partners Healthcare. There will be more hospital mergers and affiliations across Massachusetts over the next few years - a lot more - and Partners senses a new opportunity.

Steven Syre is a Globe columnist. He can be reached at syre@globe.com.